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Agent says landlords still claim billions in tax relief every year

London-focussed lettings agency ludlowthompson says buy to let landlords across the country claimed a record £17.7 billion in tax relief last year, despite new fiscal regulations.

This is up from £17.4 billion claimed in the previous year.

ludlowthompson explains that even once all of the government’s planned reductions to buy to let tax relief are fully implemented by 2020, landlords will still be able to offset £16.7 billion of their expenses against rental income.


This is despite tax clampdowns since 2015 including changes to the way wear and tear allowance is calculated and the amount of income tax relief available on interest on mortgages.

The agency says the breakdown includes £7 billion in tax relief on mortgage interest and other financial costs in the last year, plus a further £4.1 billion claimed for property repairs and maintenance. 

Landlords are still able to claim tax relief when purchasing furniture for a rental property under wear and tear allowance.

Tax reliefs allow private residential landlords to subtract their costs from their rental income – just as a small business is able to offset its expenses against its income. These costs include a tapered element of mortgage interest payments to be fully implemented by 2019-20; property repairs, maintenance and renewals; legal, management and professional fees; and rates, insurance and ground rents.

Stephen Ludlow, chairman at ludlowthompson, says: “The tax grab on buy to let investment is unwelcome but it has not undermined the attractions of buy-to-let especially when compared to the volatile stock market.”

“You’re still able to offset the vast majority of your costs - ensuring landlords will still benefit from tax relief on a high proportion of their rental income.”

But Ludlow warns that policy-makers “need to ensure they still encourage landlords to invest in buy to let. They are essential for ensuring a strong supply of high-quality rental property. This helps improve labour mobility, particularly in large economic hubs such as London. The government should look to keep further intervention in the sector to a minimum.”

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    I suppose the writer refers to legitimate business expenses when he writes tax relief?

     G romit

    Yes he does but opponents of the PRS interpret this as a subsidy/handout from the UK taxpayer.

  •  G romit

    So Stephen Ludlow how much does your company claim in tax relief? I suspect you claim all you salaries, premises costs, gas/electricity as business expenses or as you call it a tax relief. You might even claim finance costs if you've taken a business loan to expand your business!

    When will you learn that costs incurred in generating a taxible profit are legitimate business expenses, just as Landlords have finance costs, maintenance, are business expenses.
    For completeness how about publicising how much tax relief letting agents receive? Thought not!

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    I think Stephen should check things out before he comments. A landlord cannot claim tax relief for purchasing furniture for a rental unit, only replacement furniture.

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    A general principle in business since year dot, is that profits are Calculated AFTER Expenses ( whatever they are.
    Everyone in business and property should know that without writing stupid articles like this !


    Except for mortgage payment under the new Draconian rules. How crazy.

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    Just to clarify, the research by ludlowthompson was very clear in stating that that these tax reliefs are legitimate and the Government has been wrong in reducing tax allowances to BTL landlords. The whole point of the argument by Stephen Ludlow was that without these tax allowances landlords will be less likely to invest in their assets - which is not a good thing if we want a higher quality of private rental accommodation.
    This message might have been lost a little in the article above.
    It would be a strange thing for a residential property agency to argue against the interest of landlords!! (Disclosure, we assist LT with marketing, data for the research was provided directly by HMRC)


    What is the link to the research? I can only find similar articles dated December 2015 and February 2018. They are on LT's website and neither has the slightest hint of criticism of the lunatic tax on finance costs. Is Stephen Ludlow aware that the income tax payable can exceed the rental profit, and will be payable even if there is a rental loss before tax?

     G romit

    For Stephen Ludlow to call legitimate business expenses as a tax relief just have decided ammunition to those that want to destroy the PRS. Calling expenses as tax relief is leapt upon by by our opponents as a subsidy from tax payers, which it is not!


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